There’s a better way to do business, and leaders of companies are starting to get on board en masse. The rise of conscious capitalism in the 21st century seems to have started with the book Firms of Endearment by Raj Sisodia, Jag Sheth, and David Wolfe published in 2003. Studying seventy-two companies worldwide, the authors proved that if you build a company based on Love, you’ll build a high-performing company that beats the S&P 500 by fourteen times over a fifteen-year period. Companies like Southwest, REI, Interstate Battery and Whole Foods were showcased in this book.
Then the rise in B Corp movement launched in 2006 towards conscious capitalism and by the end of 2007 had certified the first 82 companies. There are now over 2500 companies certified in fifty countries around the world, and as Millennials and GenZs become the largest block of consumers, demand will continue to grow.
“The B Impact Assessment examines a company’s impact on its workers, community, environment, and customers. The BIA also asks questions about a company’s governance structure and accountability. Questions are split into two categories: Operations, which covers a company’s day-to-day activities, and Impact Business Models, which awards additional points for business models designed to create an additional positive impact. The B Impact Assessment is updated every year to incorporate feedback and improve upon the standards”.
Learn more about the performance requirements for Certification.
Next, the book published by Raj Sisodia and John Mackay- Conscious Capitalism, launched an international movement with chapters all over the world (disclosure: I’m the Board President for the Bay Area chapter).
The Rise in Conscious Capitalism outlines four tenets that a conscious business needs to operate within:
- Higher Purpose: the belief that companies have a higher purpose beyond profit. Profit is essential, but with conscious capitalism, it’s a natural by-product of operating to serve a higher purpose.
- Stakeholder Orientation: the belief that ALL stakeholders, not just shareholders, need to be taken into account when considering business decisions that may affect them. A stakeholder is anyone and anything that may be impacted by a business. Employees, supply chains, investors, the community, and the planet are all stakeholders, to name a few.
- Conscious Leadership: I always say that a company can only be as conscious as the least conscious of its top leaders. Conscious leaders display a high degree of Emotional Intelligence, Spiritual Intelligence, and Systems Intelligence. The good news? These are all learnable skills. It’s part of what we do at NextGen Orgs.
- Conscious Culture: Conscious cultures develop when the first three tenets are carefully tended to. They are transparent, accountable, and caring (Love based). There’s a level of deep trust and belonging; they are inclusive and consistently work to be equitable.
Other books have followed: Shakti Leadership, which shows how tapping into Feminine energy regardless of what sex you are will make you a better leader. A second edition of Firms of Endearment published in 2014, and most recently, The Healing Organization, Sisodia’s latest take on what it really means to be a conscious company today and how business can be used as a force for good, undoing the harm that’s been caused by capitalism since it was first introduced nearly 250 years ago.
Then most recently, nearly 200 CEOs from the Business Roundtable agreed that the purpose of business is to serve all stakeholders, not just shareholders. Nearly half of them are currently exploring getting certified as B Corps.
And just yesterday, the World Economic Forum released the Davos Manifesto 2020, which also asserted that the purpose of business is to “engage all stakeholders in shared and sustained value creation; (a) company is more than an economic unit generating wealth. It fulfills human and societal aspirations as part of the broader social system; (and a) company that has a multinational scope of activities not only serves all those stakeholders who are directly engaged, but acts itself as a stakeholder – together with governments and civil society – of our global future.” Very exciting stuff for a conscious business geek like me!
I’m currently reading How to Be an Anti-Racist by Ibram X. Kendi (highly recommend it). He writes about the “conjoined twins” of capitalism and racism. I had not previously understood the deep roots connecting the two. I know that the noble idea Adam Smith envisioned when he wrote Wealth of Nations was not intended to be racist, and I fervently believe that conscious business practices can and will root out capitalism’s current extractionist, racist practices in exchange for, and my friends in the B Corp movement like to say, “Capitalism that works for everyone, and for the long term.”
I also know that companies that choose not to get on board with this way of doing business will cease to exist in my lifetime. I’m doing my part to change the way businesses operate, are you?
Johanna Lyman is the Founder and CEO of NextGen Orgs. She is a Leadership Consultant and Executive Coach with fifteen years of experience in implementing organization wide change strategies for both Fortune 500 companies and Small Business Owners.
At NextGen Orgs, they use a combination of unique delivery methods and processes that crack the code on establishing lasting organizational behavior changes in a relatively short period of time. Their proprietary and the evolutionary system can eliminate months of frustration often associated with developing strong leadership and building a cohesive, collaborative team.
From strategic business design to culture development and leadership training, their methods can help your company become a truly great place to work. Johanna is a professional speaker, available to speak on a variety of topics related to culture, communication, innovation, and leadership skills. She is the Board President for the Bay Area Chapter of Conscious Capitalism and is deeply versed in how to help businesses be a force for good in the world.
To learn more, contact Johanna at firstname.lastname@example.org